Supplier's Default VAT (20%) not applied through bank tagging on FRS

When you enter the VAT, what you’re actually doing is splitting the invoice into 2 parts - what you’ve spent, plus the tax. The tax part is then used as part of your VAT return and other reports.

There’s a more detailed explanation here: How do I record VAT on my purchases if I’m not VAT registered?

Although you are VAT registered, with the flat rate scheme, purchase VAT isn’t relevant unless it’s something such as a capital expense.